In addition to wood and fiber, Stora Enso sources other raw materials, products, and services from over 20 000 suppliers and contractors globally. We have strict sustainability requirements for all of them.
Stora Enso’s Key Performance Indicator (KPI) for responsible sourcing measures the proportion of total supplier spend (including materials, goods, and services) covered by Stora Enso’s Supplier Code of Conduct. This coverage was 96% in Q1/2020, exceeding our target to maintain the high coverage level of 95%.
During 2019, we commissioned 62 third-party supplier audits and conducted 50 on-site visits. No supplier relationships were terminated in 2019 based on findings or follow-ups resulting from third-party audits or our own supplier visits. However, one contract was not renewed.
In 2019, 49% of Stora Enso's total variable costs consisted of purchases of materials, goods, and services, while fiber procurement accounted for 51%. Materials and products sourced by Stora Enso include wood and fiber-based materials such as pulp and paper for recycling (PfR), chemicals, fillers, energy, fuels, and spare parts, as well as maintenance, logistics, and IT services. To ensure the responsible sourcing of these materials, potential suppliers go through a pre-qualification process before being considered for a contract. We also offer training to our purchasers.
In addition to enforcing our SCoC, we actively help our suppliers improve their sustainability performance. Our topic-based “deep dives” or thorough reviews of specific supply chains, for example, help us better understand the operations, opportunities, and challenges of a supply chain related to a specific topic or category.
Based on a pre-evaluation of a supplier’s social and environmental risk profile, they may be selected for a third-party sustainability audit, conducted together with our purchaser. Any suspected SCoC non-conformances brought to our attention are investigated and followed up. Similarly, any non-conformances identified during audits are followed up with supplier meetings where the findings are discussed and corrective action plans devised. Relationships are terminated when suppliers are not willing to improve their performance.
The Stora Enso Supplier Code of Conduct (SCoC) is a binding legal document that imposes minimum sustainability requirements on suppliers. Other supporting policies include:
Through our Supplier Code of Conduct, we also implement policies and guidelines such as our Policy on Wood and Fiber Sourcing, and Land Management, Chemical Management Guideline, and Human Rights Policy.
Stora Enso can use its purchasing power to drive its suppliers to make their operations more sustainable. We consistently respond to the demands of our stakeholders concerning transparency and the sustainability performance of our suppliers. Similarly, we are looking for ways to address the growing stakeholder demand for less plastic when sourcing materials. By passing on sustainability requirements to our direct suppliers, we are able to drive positive change further down our supply chains.
Our commitment to respect human rights covers all our operations, including our employees, contractors, suppliers, and surrounding communities.